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He says: “HMRC already wins the vast majority of cases that go to court and now HMRC has taken more than £2 billion from tax-avoiders who would have otherwise benefitted from that cash while they were being investigated.

“It should be absolutely clear to anyone who is tempted by these schemes that tax-avoidance does not pay.”

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18th December 201812:39 pm

Comments

There are 9 comments at the moment, we would love to hear your opinion too.

And that is exactly the poor judgement that HMRC seems to be applying when grouping these cases together, as there are many difference types of cases.

Tax evasion is illegal and should be subject to criminal prosecution in addition for the APN action.

Tax Avoidance is LEGAL and a good portion of people on here contribute towards that in advising clients to invest in product A not product B. How would we all feel if suddenly every IFA was accused of aiding tax avoidance by helping people plan IHT with Trusts or Sipps etc.

Howeer HMRC wouldn’t look very good if they said that actually they’ve only taken a handful of cases to court since the mid 2000s and the core of the £2b hasn’t come from those cases directly, but from bullying individuals within the schemes rather than the schemes or companies providing the advice.

We have moved on people! There is no longer a black-and-white distinction between illegal tax evasion and legal tax avoidance.
The landscape is now three-dimensional; divided between illegal tax evasion, legitimate TAX-PLANNING using the explicitly laid-down reliefs such as ISAs, pensions, VCT / EIS, etc., and ARTIFICIAL TAX-AVOIDANCE using contrived schemes that pick out various parts of the tax manual, stitch them together in a (frequently) obtuse way that only the promoters and clever tax accountants can understand, and market them to unsuspecting punters who are told that they can obtain tax-relief via these schemes in ways that Parliament never intended.
The Government has tasked HMRC with cracking down on the third are and clawing back tax-relief that many of these artificial schemes have claimed in the past.
This is not to say there isn’t a problem and HMRC hasn’t gone too far (or they wouldn’t lose 20% of cases), but this reflects what I call the ‘pendulum principle’. This states that when you try to counter a problem that has gone to an extreme, like a pendulum you will not come back to equilibrium at the first attempt, but like a pendulum, will at first move almost as far in the opposite direction.

There is a vast difference between using an ISA, pension or even an investment bond to some of the schemes available by certain tax planning accountants and financial adviser.

I’m sorry but I really do have a problem, when I see a celebrity lecturing people why we should give money to charity when that same celebrity has used some fancy trust structure to funnel money through Belize or even Bermuda to zero their tax bill. See Channel 4 program How the rich stay rich.

Do I feel sorry for the individuals who used Eclipse 35 for example the answer to that is NO.

I hear an awful lot from unauthorised and unregulated tax planners who state that some of these schemes are being checked out by Queens Counsel when in fact no such check has been carried out.

If you cannot see that this is wrong and immoral and when these schemes start to become chargeable on the FSCS I hope advisers like you agree to pay a higher level of fee.

For everybody who might say that tax planning is not regulated activity nor was advice in connection with Harlequin Property but we still ended up paying higher fees.

It is the duty of every IFA to give sensible tax planning advice but it isn’t our job to go out of the way to deliberately break the tax system to the detriment of everybody.

All this yet again rather misses the point. Tax avoidance is legal, tax evasion is not. It is no good getting huffy if those with the wherewithal employ clever people to legally minimise or negate their tax bills. The problem lies with the fools in Westminster. On the one hand they want to trawl as much tax as possible and on the other want to make the UK attractive to foreign investments. As the CEO of Google has said, the UK tax system is a mess. It is up to Government to sort it and understand the difference between avoidance and evasion. (As should journalists, not to mention advisers!)

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